Exploring the Top Layer 2 Blockchain Networks on Ethereum: Pros, Cons, and Use Cases for Developers

Ethereum is the second-largest blockchain network in the world, with a market capitalization of over $200 billion as of April 2023. The network is designed to support the creation and deployment of decentralized applications (dApps) and smart contracts.

However, as the popularity of Ethereum has grown, so too have its scalability issues. The network is currently only able to process around 15–45 transactions per second (TPS), which is significantly lower than traditional payment processors like Visa (which can process over 24,000 TPS). This limitation has led to the development of layer 2 scaling solutions, which are designed to improve the throughput and performance of the Ethereum network.

In this article, we will explore the top layer 2 blockchain networks on Ethereum and discuss the pros and cons of each. We will also examine the use cases that are best suited for each layer 2 network and provide some code examples to help software developers better understand how to implement these technologies.

1. zkSync

zkSync is a layer 2 scaling solution for Ethereum that uses zero-knowledge proofs (zk-proofs) to improve the throughput of the network. The technology allows for the processing of transactions off-chain, with zk-proofs used to verify the validity of transactions. Once verified, the results are submitted to the Ethereum network for settlement.

One of the benefits of zkSync is its high throughput. The technology is capable of processing up to 2,000 transactions per second, significantly higher than the Ethereum network’s current capacity. zkSync also offers improved privacy, as transactions are processed off-chain and not visible on the Ethereum network until they are settled.

However, zkSync is not without its limitations. The technology is still in its early stages and is not yet widely adopted. Additionally, there is a risk of users losing their funds if the zk-rollup is compromised.

Use Cases: zkSync is best suited for applications that require high throughput and improved privacy, such as payment processing or gaming applications. Here’s an example of how to implement zkSync in a Solidity smart contract:

pragma solidity ^0.8.0;

import "zksync.sol";

contract MyContract {
    using zksync for address;

    function deposit() public payable {
        address syncWallet = msg.sender.getSyncAddress();
        syncWallet.deposit{value: msg.value}();
    }

    function withdraw(uint256 amount) public {
        address syncWallet = msg.sender.getSyncAddress();
        syncWallet.withdrawTo(msg.sender, amount);
    }
}

2. Optimism

Optimism is a layer 2 scaling solution for Ethereum that uses optimistic rollups to improve the throughput of the network. The technology allows for the processing of transactions off-chain, with the results submitted to the Ethereum network for verification. Optimism also provides improved security, with the ability to rollback transactions in case of any issues.

One of the benefits of Optimism is its ease of use. The technology is designed to be user-friendly, making it accessible to a wide range of users. Optimism also offers improved scalability, with the potential to process thousands of transactions per second. The technology is also highly customizable, making it suitable for a wide range of applications.

However, Optimism is not without its limitations. The technology is still in its early stages and is not yet widely adopted. There is also a risk of users losing their funds if the side chain is compromised, although this risk can be mitigated through proper security measures.

Use Cases: Optimism is best suited for applications that require high throughput and ease of use, such as decentralized exchanges or social media platforms. Here’s an example of how to implement Optimism in a Solidity smart contract:

pragma solidity ^0.8.0;

import "contracts/L2DepositedERC20.sol";
import { L2ToL1TxEvent } from "./contracts/optimistic-ethereum/libraries/bridge/interfaces/I_OVM_BaseCrossDomainMessenger.sol";

contract MyContract is L2DepositedERC20 {

  function deposit(uint256 amount) public {
    super.deposit(amount);
    emit L2ToL1TxEvent(msg.sender, amount, msg.sender, L1DepositMessenger, message);
  }
  
  function withdraw(uint256 amount) public {
    super.withdraw(amount);
    emit L2ToL1TxEvent(msg.sender, amount, msg.sender, L1WithdrawMessenger, message);
  }
}

3. Arbitrum

Arbitrum is a layer 2 scaling solution for Ethereum that uses optimistic rollups to improve the throughput of the network. The technology is designed to be highly scalable, with the potential to process thousands of transactions per second.

Arbitrum also offers improved security, with the ability to rollback transactions in case of any issues. One of the benefits of Arbitrum is its ease of use. The technology is designed to be user-friendly, making it accessible to a wide range of users. Arbitrum also offers improved interoperability, with the ability to interact with other Ethereum-based applications and smart contracts.

However, Arbitrum is not without its limitations. The technology is still in its early stages and is not yet widely adopted. There is also a risk of users losing their funds if the side chain is compromised, although this risk can be mitigated through proper security measures.

Use Cases: Arbitrum is best suited for applications that require high throughput and interoperability, such as decentralized exchanges or gaming platforms. Here’s an example of how to implement Arbitrum in a Solidity smart contract:

pragma solidity ^0.8.0;

import "arb-bridge-eth/contracts/libraries/BytesLib.sol";
import "arb-bridge-eth/contracts/IArbToken.sol";

contract MyContract {
  using BytesLib for bytes;
  
  IArbToken public arbToken;

  constructor(address _arbToken) {
      arbToken = IArbToken(_arbToken);
  }
  
  function deposit() public payable {
      arbToken.bridgeMint(msg.sender, msg.value);
  }
  
  function withdraw(uint256 amount) public {
      arbToken.bridgeBurn(msg.sender, amount);
      msg.sender.transfer(amount);
  }
}

4. Polygon

Polygon is a layer 2 scaling solution for Ethereum that uses plasma side chains to improve the throughput of the network. The technology is designed to be highly scalable, with the potential to process thousands of transactions per second. Polygon also offers improved interoperability, with the ability to interact with other Ethereum-based applications and smart contracts.

One of the benefits of Polygon is its ease of use. The technology is designed to be user-friendly, making it accessible to a wide range of users. Polygon also offers improved security, with the ability to rollback transactions in case of any issues.

However, Polygon is not without its limitations. The technology is still in its early stages and is not yet widely adopted. There is also a risk of users losing their funds if the side chain is compromised, although this risk can be mitigated through proper security measures.

Use Cases: Polygon is best suited for applications that require high throughput and interoperability, such as decentralized exchanges or gaming platforms. Here’s an example of how to implement Polygon in a Solidity smart contract:

pragma solidity ^0.8.0;

import "matic/contracts/child/ChildERC20.sol";

contract MyContract is ChildERC20 {

  function deposit(uint256 amount) public {
      super.deposit(amount);
  }
  
  function withdraw(uint256 amount) public {
      super.withdraw(amount);
  }
}

5. zkSync

zkSync is a layer 2 scaling solution for Ethereum that uses zero-knowledge proofs to improve the throughput of the network. The technology is designed to be highly scalable, with the potential to process thousands of transactions per second. zkSync also offers improved security, with the ability to rollback transactions in case of any issues.

One of the benefits of zkSync is its high level of security. The technology is designed to be highly secure, with the ability to detect and prevent fraud or other malicious activity. zkSync also offers improved privacy, with the ability to keep transactions and user data private.

However, zkSync is not without its limitations. The technology is still in its early stages and is not yet widely adopted. There is also a risk of users losing their funds if the side chain is compromised, although this risk can be mitigated through proper security measures.

Use Cases: zkSync is best suited for applications that require high security and privacy, such as financial applications or voting systems. Here’s an example of how to implement zkSync in a Solidity smart contract:

pragma solidity ^0.8.0;

import "zksync/contracts/token/ERC20/IERC20.sol";
import "zksync/contracts/token/ERC20/utils/SafeERC20.sol";
import "zksync/contracts/utils/Utils.sol";
import "zksync/contracts/ZkSync.sol";

contract MyContract is Utils {
  using SafeERC20 for IERC20;
  
  ZkSync public zkSync;
  IERC20 public token;
  
  constructor(address _zkSync, address _token) {
      zkSync = ZkSync(_zkSync);
      token = IERC20(_token);
  }
  
  function deposit(uint256 amount) public {
      token.safeApprove(address(zkSync), amount);
      zkSync.depositERC20(address(token), amount);
  }
  
  function withdraw(uint256 amount) public {
      zkSync.withdrawERC20(address(token), amount);
      token.safeTransfer(msg.sender, amount);
  }
}

Conclusion

In conclusion, layer 2 scaling solutions are becoming increasingly important for developers looking to build high-throughput, low-cost applications on Ethereum. Each of the layer 2 solutions discussed in this article has its own strengths and weaknesses, and the best choice will depend on the specific use case of the application.

Developers should carefully consider the pros and cons of each solution and choose the one that best suits their needs. It’s also important to keep in mind that layer 2 technology is still in its early stages and is subject to change as the technology evolves.

Overall, layer 2 solutions are an exciting development in the world of Ethereum and offer a promising path towards greater scalability, security, and interoperability. By staying up to date on the latest layer 2 technologies and best practices, developers can take full advantage of the benefits offered by this emerging technology.